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HomeMy WebLinkAboutContracts & Agreements_65-2000_CCv0001.pdf AGREEMENT FOR ACQUISITION OF PROPERTY By PURCHASE OR CONDEMNATION THIS AGREEMENT FOR ACQUISITION OF PROPERTY BY PURCHASE OR CONDEMNATION ( "Agreement" ) is made and entered into as of this 20th day of June, 2000, by and between HOME DEPOT U.S.A. , INC. , a Delaware corporation ( "Home Depot" ) and the CITY OF REDLANDS, a municipal corporation (the "City" ) with respect to the following: R E C I T A L S A. Home Depot has contracted to purchase two parcels of land consisting of a total of approximately 18 . 23 acres located at the southeast corner of Lugonia Avenue and Tennessee Avenue in the City of Redlands, San Bernardino County, California. Home Depot intends to develop, build and operate a retail home improvement business and shopping center (collectively, the "Shopping Center" ) on such property, and is presently processing applications for the City' s consents and approvals necessary for the development, construction and operation of the Shopping Center (the "Entitlements" ) . B . As part of the Entitlements, Home Depot has submitted Tentative Parcel Map No . 15492 (the "Tentative Map" ) to the City. One of the conditions to the City' s approval of the Entitlements and the Tentative Map obligates Home Depot to improve and dedicate to the City certain offsite real property, a portion of which includes the small parcel fronting Lugonia Avenue which is more particularly described in Exhibit "All attached hereto (the "Subject Property" ) . The Subject Property is not owned or controlled by Home Depot or the City, but by Lugo Water Company, a California corporation ( "Lugo" ) . C. Home Depot has made diligent, good faith efforts to locate an authorized representative of Lugo in order to negotiate terms for the purchase and sale of the Subject Property, but has been unable to do so. Home Depot is advised that 'Lugo has not operated as an active business since approximately 1978, and that it is no longer authorized or qualified to conduct business as a corporation under the laws of the State of California. D. Section 66462 . 5 of the Government Code provides that a local agency shall not postpone or refuse approval of a final map where the subdivider has failed to meet a tentative map condition which requires the subdivider to construct or install offsite improvements on land in which neither the subdivider nor the local agency has sufficient title or interest, at the time the tentative or final map is filed, to permit the improvements to be made. Section 66462 . 5 further provides that in such cases the HOMEDEPO\REDLAN02kCITY03.AGT\061200 local agency shall either (i) acquire such offsite property by negotiation or eminent domain proceedings, or (ii) waive the condition. Finally, Section 66462 . 5 provides that a local agency may require the subdivider to pay the cost of acquiring offsite real property interests in connection with the statute. E. The City has or will shortly approve the filing for record of a final Parcel Map based upon the Tentative Map. F. Home Depot has reported its diligent, good faith efforts to negotiate an acquisition of the Subject Property to the City, and has requested that the Redlands City Council (the "City Council") either W waive the condition to its approval of the Tentative Map requiring Home Depot to improve and dedicate the Subject Property, or (ii) acquire the Subject Property by negotiation or by commencement of proceedings under the Eminent Domain Law. G. Following consideration of Home Depot' s request, the City Council has determined that an acquisition of the Subject Property is necessary or desirable, and has, therefore, declined to waive the condition. The City Council further determined to authorize the City staff to undertake steps, pursuant to and in compliance with all applicable laws, for the initiation of negotiations with Lugo to acquire the Subject Property, or, if such negotiations are not possible or successful, for the commencement of proceedings under the Eminent Domain Law. H. The City and Home Depot desire to memorialize their agreement with respect to the foregoing as more fully set forth below. NOW, THEREFORE, incorporating the foregoing recitals, and in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City and Home Depot hereby agree as follows : A G R E M E N T 1 . Acquisition Costs . Home Depot shall be responsible for reimbursing the City for the costs of acquiring the Subject Property (the "Home Depot Reimbursement" ) . The amount of the Home Depot Reimbursement shall include (i) all reasonable out-of- pocket costs and expenses incurred by the City in connection with the acquisition of the Subject Property, including, without limitation, the purchase price for the Subject Property, appraisal costs, title and escrow fees and expenses, and, if necessary, court costs and deposits, attorneys' fees and litigation expenses (collectively, the "Acquisition Costs") . HOMEDEPOkREDLAND21CITY03.AGT1061 200 -2- (a) Deposit , Performance Bond. Within ten (10) days after the date of this Agreement, Home Depot shall deliver its check in the sum of Ten Thousand Dollars ($10, 000 . 00) (the "Deposit") to the City, to be used by the City as and when the Acquisition Costs are incurred. In addition to the Deposit, the City may require Home Depot to provide to the City a faithful performance bond or a letter of credit (in a form approved by the City) in an amount determined by the City to assure performance of Home Depot' s reimbursement obligations under this Agreement . (b) Additional Deposit Funds . In the event that payments or withdrawals from the Deposit posted by Home Depot cause the amount of such Deposit to at any time be reduced to a sum less than Two Thousand Dollars ($2 , 000 . 00) , Home Depot may be required by the City to provide additional funds in order to replenish the original amount of the Deposit, provided that such funds are reasonably determined by the City to be necessary to complete the acquisition of the Subject Property. Home Depot shall deposit such additional funds with the City within ten (10) days following receipt of the City' s written request for same . (c) Failure to Maintain Deposit . In the event that Home Depot fails to deposit additional funds with the City as and when required under this Paragraph 1, the City may, without liability to Home Depot, elect to suspend all efforts in connection with the acquisition of the Subject Property. 2 . Appraisal of Subject Property. The parties acknowledge that in order to proceed with the acquisition of the Subject Property, the City must comply with certain statutory requirements, including, without limitation, making a purchase offer to the owner of the Subject Property before commencing negotiations with such owner in accordance with Section 7267 . 2 of the Government Code . The City shall retain an appraiser to make a fair market value appraisal of the Subject Property in accordance with instructions provided by the City. The appraiser shall be certified by the State of California and be a Member of the Appraisal Institute (MAI) . The sum offered to the owner of the Subject Property shall be in the amount established as lust compensation by the fair market value appraisal . 3 . Resolution of Necessity. The parties acknowledge that the City cannot file an eminent domain action until the City Council has adopted a resolution of necessity pursuant to the provisions of the Eminent Domain Law, after giving the owner of the Subject Property the right to be heard in opposition to the proposed adoption of such resolution. (a) Condition to City Action. Home Depot acknowledges that the City may, after the hearing on the proposal to adopt a resolution of necessity, exercise its discretion by refusing to adopt such a resolution, and that the City cannot make an HOMEDEPO\REOLAND21CITY03.AGTt061200 -3- irrevocable commitment to acquire the Subject Property by eminent domain unless and until a resolution of 'necessity is adopted. (b) City' s Best Efforts. Herne Depot further acknowledges that, until such time as the City Council has exercised its discretion after a hearing on the proposal to adapt a resolution of necessity, any references by the City staff to the acquisition of the Subject Property by eminent domain shall be considered representations by the City staff to use their best efforts to acquire the Subject Property, 4 Disputes R.ecrardine Fair Value , The City agrees to use its best efforts to settle any dispute over the amount o compensation to be paid for the Subject Property pursuant to this Agreement for an amount as dose as 'possible to what the ;City considers to be just compensation. In no event shall such settlement be less than what is determined to be the fair market value of the Subject Property, together with ether legally compensable and reasonably probable damages, if any. (a) Home Depot' s Consent . In the event that the City proposes to make an offer to acquire the Subject Property in an amount that is higher than the probable amount of just compensation determined by the appraiser, or in the event that the owner of the Subject Property mares a demand to sell such property for an amount that is higher than the probable amount of just compensation determined by the appraiser, the City shall provide written notice to Home Depot of any such proposed offer or demand, and shall in good faith consult thereon with Home Depot before the City makes such an offer orresponds to such a demand. (b) Settlement by Comuromise. Home Depot acknowledges that the City may, in the exercise of its reasonable and goad faith discretion, settle any dispute over the fair market value of the Subject Property between the appraised just compensation and the amount demanded by the owner of the Subject Property by, way of a compromise, recognizing the risks and uncertainties associated with litigation to mane such a determination, 5 • Selection of Counsel and Consultants, While the parties acknowlod.ge that the City shall have control over the selection of attorneys, appraisers, and other expert witnesses and consultants as may be required for an eminent domain action, the City agrees to consult and confer in good faith with Home Depot regarding such selections. While the parties further _ acknowledge that the City shall maintain control over `the <conduct of any eminent domain action as well as the ultimate settlement of such an action, including the amount of just compensation paid for the Subject Property, the City also agrees to consult and confer in good faith with Home Depot regarding any such proposed settlement. Dome Depot shall not be considered a party to any HO EDEPO',REDL"ID2%CITY03.AGTXOS12 0 -4- eminent domain action initiated by the City pursuant to this Agreement . 6 . Performance by Home Depot . Home Depot agrees to commence and diligently pursue to completion the offsite improve- ments involving the Subject Property as required under the condi- tions of approval of the Tentative Map promptly upon the City' s obtaining title to the Subject Property pursuant to (i) grant deed from the owner thereof, (ii) final judicial order condemning the Subject Property, or, if appropriate, (iii) upon the City' s obtaining an order for immediate possession of the Subject Property pursuant to Code of civil Procedure Section 1255 . 410 . 7 . Accounting of Expenses . Upon the City' s acquiring title to the Subject Property pursuant to grant deed from the owner thereof or by final judicial order condemning the Subject Property, the City shall immediately provide Home Depot with an accounting of all of the Acquisition Costs incurred by the City in connection with such acquisition, and shall notify Home Depot of the amount of the Home Depot Reimbursement determined pursuant to Paragraph 1 above . (a) Payment of .Balance ,of Expenses . If the amount of the Home Depot Reimbursement exceeds the total amount of the cash deposits posted with the City by Home Depot for acquisition of the Subject Property, Home Depot shall tender the remaining sum due within ten (10) working days after its receipt of the City' s written demand therefor. (b) Reimbursement/Release of Securities . If the amount of the Home Depot Reimbursement is less than the total amount of the cash deposits posted with the City by Home Depot for acquisition of the Subject Property, the City shall reimburse such excess deposit funds to Home Depot (and exonerate all relevant bonds or letters of credit posted by Home Depot) within ten (10) working days after the date of the accounting. 8 . Notices . All notices or other communications required or permitted hereunder shall be in writing, and shall be L personally delivered, sent by overnight mail (such as Federal Express) or by registered or certified mail, postage prepaid, return receipt required, or sent by facsimile, and shall be effective upon receipt at the address set forth below. To Home Depot : Home Depot U.S.A. , Inc . 3800 West Chapman Avenue Orange, California 92868 Attention: Real Estate Department and Legal Department Fax No. (714) 940-3632 HOMEDEPO1REOLAN021CITY03.AGr,061200 -5- With Copy to: Peter N. Kalionzes, Attorney at Law 610 Newport Center Drive Suite 700 Newport Beach, California 92660 Fax No . (949) 717-3100 To City: Daniel J. McHugh, Esq. City Attorney, City of Redlands P.O. Box 3005 Redlands, California 92373-1505 Fax No. (909) 798-7503 9 . Miscellaneous . (a) Advice of Counsel . The parties acknowledge that in entering into and executing this Agreement, they have had the opportunity to seek and receive independent advice and counsel as to their respective legal rights and obligations . (b) Entire Agreement . This Agreement contains the entire agreement and understanding between the parties concerning the subject matter herein, and supersedes any and all prior or contemporaneous agreements or understandings between them. The City and Home Depot each declare and represent that no promise, representation or agreement beyond those expressly contained in this Agreement has been made to induce it to execute this Agreement . (c) Attorneys' Fees . In the event that legal proceed- ings are initiated to enforce or interpret the provisions of this Agreement, the prevailing party in such proceedings shall be entitled to recover from the losing party all costs incurred in connection therewith, including court costs and reasonable attorneys' fees . (d) California Law. The parties agree that this Agreement shall be governed by and interpreted under the laws of the State of California, and shall be construed as if it were drafted by all parties . HOMEDEPO\REDLAND21CITY03.AGT1061200 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year written above . "CITY" APPROVED AS TO FORM: CITY OF REDLANDS, DANIEL J. McHUGH, a municipal corporation CJ."'.--y Attorney By: By ._. A�h . Da/lei J. McHugh ATTEST . tY "HOME DEPOT" APPROVED AS TO FORM: HOME DEPOT U.S.A. , INC. , PETER N. KALIONZES, a Delaware car oration Attorney at Law t BY: Daniel R. Hatcher N. Kali es Senior Corporate Counsel, � = Western Division HOMEDEPO\REDCAND2;CITY03.AGTi061200 -7- EXHIBIT "A" TO AGREEMENT FOR ACQUISITION OF PROPERTY BY PURCHASE OR CONDEMNATION (Legal Description of the Subject Property) THE NORTH 48 .00 FEET OF THE WEST 55 . 00 FEET OF THE EAST 451 . 00 FEET OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 21, TOWNSHIP 1 SOUTH, RANGE 3 WEST, SAN BERNARDINO BASE AND MERIDIAN, IN THE CITY OF REDLANDS, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, ACCORDING TO THE OFFICIAL PLAT THEREOF. HOMEDEPO\REDLAND2XCITY03.AGT!061200 -8-